EMU IP is showing a gain in December of 1%. Month to month. It is still falling over 3-Months and six months and 12-months. But the pace of its decline is slowing. Output in the EMU region is still some 5.2% below its past cycle peak.

Despite the improvement the pattern of the drop has IP falling at a very sharp 9.8% annual rate in Q4. But because IP hit its low point in the middle of the quarter (November) and has had a rise in December, should production be flat in January it will post a positive growth rate of 2.7% annualized over the fourth quarter average. Despite the bad Q4 result output is already on path to do some good if the one month gain in output does not prove to be a fluke.

Both consumer goods and capital goods output rose in December with intermediate goods output suffering a drop of -0.2%.

Across seven selected EMU members output in December advanced in six of them falling only in Portugal in December. Over three months output in France and in Germany is contracting while output in Finland, The Netherlands, Spain, Ireland, Greece and Portugal is increasing. It is the middle and weaker countries in the Zone that have been experiencing some revival. Still, that is a very short-term phenomenon as output is down six of these seven countries over six-months and in five of seven over 12-months.

In terms of EMU sector trends consumer goods output is advancing over three-months and rather strongly at a 6.7% annual rate. It is up by a small amount over six months and yet it is still lower Yr/Yr. Consumer durable goods trends are still deeply negative. Intermediate goods also are declining at progressively faster rates over shorter periods. Capital goods output has been in a steady 2% decline but that has stepped up to a 4.5% pace of decline over three-months. The sector news is only positive for consumer nondurables and that is offset by durable goods weakness.

On balance there are hints of EMU IP doing better. But the trends are not wholly positive. The most positive news is in December alone. But taken out of context there is still a lot of surrounding weakness. It's too soon to declare that an improvement is in train. But it's also not possible to deny it.